That Trusted Employee May Be Ripping You Off —Michelson
Industry suppliers are not immune to fraud, either. As reported on our news pages in this issue, the former CFO of the then-Pitman Co., plead guilty to wire fraud and tax evasion for embezzling $2 million from the New Jersey-based graphic arts distributor. John Eichner admitted to falsifying his expense reports from 2003 through 2009. Eichner appeared to have good taste and a penchant for the finer things in life. He turned in personal expenses that included stays at luxury hotels; clothing and jewelry from high-end retailers Nordstrom, Coach and Tiffany & Co.; and even wire transferred $30,000 directly from Pitman accounts to pay for cases of wine that he bought from Sotheby's.
Last May, I wrote an editorial about Albert Gehly, owner of Vermont Graphics in Bellow Falls, VT. He had to come out of semi-retirement and lay off employees to help keep his business afloat after learning that his part-time bookkeeper embezzled more than $700,000 from his shop during a 14-year time frame. Similar to the other cases mentioned above, Gehly is doubtful he will receive much, if any, restitution. Almost as galling is the lackadaisical stance typically taken by authorities and court systems in even wanting to investigate and prosecute these type of white-collar crimes. Claiming that court dockets are overburdened with more serious, violent crimes, prosecutors are inclined to work out pre-trial plea agreements that often result in light prison sentences for the perpetrators.
I recently received a letter from Gehly's son-in-law, thanking me for bringing attention to their case. "Sadly, the interest in continuing [Vermont Graphics] by the third generation isn't there...the kids already have a strong sense of what can happen in the world of printing and business, in general," he wrote. "While the industry and company have put food on the tables and decent cars in each driveway, there exists a caution that must be taken toward hiring employees in positions of financial authority. Trust comes at a price, and the kids are well aware of the five families that were sacrificed by the bookkeeper to ensure her personal cash flow continued." Also, some food for thought.